1. Tesla, owned by Elon Musk, saw a substantial drop in quarterly profits due to EV market challenges.
2. Q1 earnings stood at $1.13 billion, marking a 55% decline from the previous year.
3. Revenues reached $21.3 billion in the first quarter, reflecting ongoing market complexities.
Pretoria, April 24: Tesla, under Elon Musk’s ownership, experienced a significant decline in quarterly profits amid challenges in the electric vehicle market.
In the first quarter of the year, the company recorded earnings of $1.13 billion, a 55% decrease from the same period last year, with revenues totalling $21.3 billion.
Musk described the recent job cuts at Tesla as a “necessary step” to reorganize the company for its next phase of growth.
According to Chief Financial Officer Vaibhav Taneja, the job cuts, which exceed 10% of the workforce, will result in annual cost savings of over $1 billion for Tesla.
Taneja also outlined Tesla’s plans to expedite the launch of new models ahead of the previously scheduled start of production in the second half of 2025.
These new vehicles will include more affordable models aimed at expanding Tesla’s market reach.
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Elon Musk emphasized that production on these vehicles will commence either in early 2025 or late 2024 and clarified that this timeline is not contingent on the establishment of new factories or extensive production lines.
Musk expressed confidence in Tesla’s ability to solve autonomy challenges, stating that sceptics should reconsider their investment in the company if they doubt its potential in this regard.
Despite the significant drop in quarterly profits, Tesla’s stock price saw a notable increase in after-hours trading, with shares rising by 11%.
However, the company’s stock has experienced a decline of more than 40% since the beginning of the year.
Tesla attributed its lower earnings and revenue in the first quarter to a nearly 9% decrease in worldwide sales and a decline in the gross profit margin to 17.4%.
In response to these challenges, Tesla announced its intention to focus more on the production of new, more affordable vehicles, aiming to meet the evolving demands of the electric vehicle market.
This strategic shift reflects Tesla’s commitment to innovation and adaptation in a rapidly changing industry landscape.
